Cigar Industry

COVID-19: How Cigar Shops Are Responding to the Coronavirus Pandemic

Boosting cleaning regimens, adding curbside pickup and reducing staff are some of the ways retailers are managing
Mar 20, 2020 | By Gregory Mottola
COVID-19: How Cigar Shops Are Responding to the Coronavirus Pandemic

With businesses shutting down across the United States, and reports of Coronavirus multiplying with every news cycle, many cigar stores remain open despite this time of national crisis. Most have closed their lounge areas and reduced staff, but still allow customers to buy cigars. Others have had to close their shops completely. And for a lucky few, it’s still business as usual.

The Cigar Aficionado editorial team interviewed retailers around the country to see what they’re doing to keep their doors open, how they’re supplying cigars to their customers and how they’re managing to stay compliant with city and state regulations as they constantly change.

Friday in New York, which currently has more reported cases of Coronavirus than any state in the U.S., Gov. Andrew Cuomo ordered 100 percent of the state’s nonessential workforce to stay home. Effective Sunday 8 p.m., this mandate will close down shops like Matador Cigars on suburban Long Island and Barclay-Rex in New York City.

“We have been through disasters like [Super Storm] Sandy and 9/11, but those events felt different,” said Vanessa Nastri, whose father owns Barclay-Rex in lower Manhattan. “They had more of a timeline of when normalcy would return to New York City. This is scary because so much is unknown.”

Further uptown near Grand Central Terminal, Nat Sherman pre-empted the state order and had already closed.

“A healthy business depends on healthy people, and we’re committed to doing our part,” said Michael Herklots, vice president of Nat Sherman International Inc. “This short-term disruption will hopefully allow us to reopen soon and get back to business as usual for the long-term.”

Whether the disruption is short-term or not is still unknown. In Boston, owner Stephen Willet of L.J. Peretti doesn’t seem as optimistic. His shop is open, but he said that business has slowed to a crawl. He started working at the store in 1973, and this is the slowest he’s ever witnessed.

“It’s like a ghost town,” Willet said. “The walk-in [customers are] at least off by two-thirds, the mail order has been alright.” He compared the slowdown to the Blizzard of ‘78, when the Northeast was paralyzed by crippling amounts of snow. “There were more people around then. A lot of them didn’t have any money, but they were around,” he said. Willet has shut down his small place in the back, where people could sit and smoke, and reduced his hours, closing three hours early. “I have no idea what I’m doing about the weekend yet. It’s day by day.”

Things aren’t quite as desolate one state north in New Hampshire, at least not according to David Garofalo. So far, he’s been able to maintain normal business hours in his three locations of Two Guys Smoke Shop. He told Cigar Aficionado that the lounges are still open with about 20 seats in each lounge mostly occupied, adding that his store now has an hourly cleaning and disinfecting regiment. “The phone rings all the time with people asking if we’re open and if the smoking lounge is open,” Garofalo said. “Sometimes the customer is surprised but happy to hear it. Sales have been good, nothing to complain about.”

Outside of Pittsburgh in the suburb of Bridgeville, Mame Kendall’s Smoke Cigar Shop and Lounge is still open, but she’ll have to close tomorrow due to Pennsylvania’s statewide mandate to shut down nonessential businesses.

“We are finishing our cleaning project, and will try to offer delivery to all. It’s my only choice,” she said. “I also am concerned with trying to keep my employees working. That’s very important to me, even if it puts me in the poorhouse. We are washing walls, ceilings, etc. COVID is definitely here. I have never experienced anything like this before. In fact no one alive probably has. I went from fear to tears to saying, ‘Well if we have to limit business, let’s scrub the shit out of stuff.’ ”

Unlike many other states, Pennsylvania has no tobacco tax, making it an attractive home not only to small businesses like Smoke Cigar Shop, but large cigar distribution companies. Cigars International in Bethlehem Pennsylvania is America’s biggest online retailer of premium cigars, but it has multiple brick-and-mortar locations as well, most of which are spacious megastores with large lounges and massive inventory. It has three locations in Pennsylvania, known as the Keystone State. Its lounge areas are closed, but the stores are open for curbside pick-up until tomorrow, when it will have to close its doors along with most of Pennsylvania.

“We’re following the mandates that have been put in place by the state and the local governments,” said Matt Cook, director of retail operations for Cigars International, who added that the company is still offering curbside service for its Dallas-Fort Worth, Texas location.
There’s a big difference between places like Bethlehem and larger cities like Philadelphia, which has 20 times the population. In the City of Brotherly Love, Holt’s was already forced to close its retail stores to shoppers (and the Ashton Cigar Bar to customers) due to the Coronavirus outbreak. The Philadelphia shops will stay closed until March 27. Today is the last day of curbside pickup, a service that’s offered at the Townsend Road location. The company’s online ordering system is still operational.

Farther south in the eastern U.S., the impact hasn’t been as severe and that is reflected in the cigar shop world. “Business has been great in all locations the trailing week,” said Craig Cass, owner of four Tinderbox stores in North Carolina. (He also owns a shop in South Carolina.) “March started out slowly but the second week roared as people began working from home and realized there may be a broader shut down of retail in general. Traffic counts were down but ticket averages were up two to three times.”

Cass has lost one of his shops, however, as he has one location inside a mall, which was ordered to shut down at 7 p.m. on Wednesday.

The same thing happened to Gary Pesh, owner of Old Virginia Tobacco Co. He had to close down one of his stores located in the Fashion Centre Mall in Pentagon City, Virginia. The entire mall will be closed until at least March 29, leaving five more Old Virginia Tobacco locations across the state that are still open for business.

“The other five stores are staying open unless the government shuts us down,” Pesh told Cigar Aficionado. “Our store lounges remain open but we have instituted hyper-cleaning procedures, such as wiping down all handles, counters, chairs and not allowing customers to touch cigars unless they purchase them. Our team is in the humidor with all customers to assist them. We still have people coming in to smoke and are limited to no more than 10 people at a time as recommended.”

Other than his one store closing, Pesh said that business has been constant.

“We have had an increase in average sales per receipt,” he explained. “Maybe they’re stocking up in case they are banned from travelling. We are seeing new faces, mostly teleworkers or those stuck at home.”

As the third most populous city in the U.S., Chicago has gone quiet. “We’ve been open for business as usual, but today, it’s as quiet downtown as it’s ever been. It’s [like] a winter Sunday. There’s nobody out,” said Billy O’Hara, owner of Jack Schwartz Importer located in downtown Chicago when interviewed on Thursday. While foot traffic is way down, his mail-order business has been “off the charts” as people stock up in anticipation of further lockdowns. O’Hara too is acting as if things could be shut down. “I don’t know what to expect going forward,” he said. “I’m working every hour, every minute, as if at midnight I can’t come to work [the next day]. I’m grateful for every sale I make right now.”

Even though he anticipates this being a long-term event, saying “this is not going away anytime soon,” O’Hara takes some solace in the fact that his customer base is generally in good shape when compared to the economic crisis of 12 years ago. “This is not 2008. Companies and individuals have better balance sheets. They’re prepared to weather the storm.”
If you happen to be a regular customer of Outlaw Cigar Co. in Kansas City, Missouri, keep in mind that there’s a new rule: don’t touch the cigars. That is, unless you know for sure that you’re going to buy them. It’s a precaution that owner Kendall Culbertson said he’s never had to take before, and apparently, his clients are stocking up anyway.

“Lounge business has been largely shut down,” he said, “but regular customers that buy a few cigars at a time are now buying boxes in fear that we might have to close down our business. Everything is sanitized. Credit card machine, countertops, keyboards, door knobs and so forth. I plan to keep staff fully employed throughout this crisis.”

Culbertson anticipates business dwindling to “near nothing” by next week, but it seems that Las Vegas is already there. Sin City went dark on Wednesday, when Nevada Governor Steve Sisolak ordered all nonessential business closed. 

“Everything is now closed for at least 30 days,” said Michael Frey, who owns several shops in the Las Vegas area. Last-minute buyers hurried in before the deadline. “We did have a great rush of business before we closed at noon.” 

“The paralysis of business on the Strip is surreal and depressing,” said Matt Arcella, owner of the Davidoff Cigar Bar in Las Vegas and several shops on the Strip. “Like so many other communities globally, we recognize the need for these extreme actions. However, the lack of immediate economic support from the government is creating a collateral epidemic impacting all. We are doing everything we can to take care of our team throughout this closure. Traditional bureaucracy is prevailing: all talk and no action.”

With more than 1,000 confirmed cases of Coronavirus in California (the third most in the country), the story is much the same at Hollywood Cigars in Santa Monica, which was forced to shut its doors due to a statewide order for all Californians to stay at home. Greg Shahbazian calls the virus the last element of a perfect storm. His store had just reopened in a new location after briefly closing to move, when the city ordered its closure for retail as well as lounge activity. According to the order, pending further notice, it could reopen on April 1, but he is not optimistic about that. “We don't know if it will,” he said, noting that the virus has disrupted the entire economy. “Cigars are not a staple. People don't need to have them.”

While he suspects conditions may get worse, he feels that stores need to ride it out. “It may not get back to great, but it could get back to decent.”

“I wish we closed everything for two weeks to stop the spread of the virus,” said Vartan Seferian, owner of two Ambassador Fine Cigars in Arizona, with shops in Phoenix and Peoria. “My stores are still open for business, but we reduced the hours in one location [Peoria] where we have a bar.” 

His stores also had to restrict the maximum capacity to only 10 people. Seferian added that no one is shaking hands at the shop, employees are using hand sanitizer and washing hands more often, and they are constantly disinfecting countertops, door knobs, TV remotes and phones.

“Customers are coming in, but of course, business is down,” he said.

Jeff Borysiewicz owns three large stores in Florida: one Davidoff shop in Tampa, and three large stores in the Orlando area, ironically named Corona Cigar Co. “All of our stores, including our bars, are open for business,” he said in a letter to his customers. “On March 17, Florida Gov. Ron DeSantis issued an executive order that shut down all bars and nightclubs that derive more than 50 percent of their gross revenue from the sale of alcoholic beverages for 30 days. Fortunately, all of our stores fall below that 50 percent threshold so all our stores and bars are allowed to continue to serve alcohol.”

Borysiewicz said that cigar sales are down just a little bit in the stores but bar sales “are way off. Mail order is up. I’m just glad we aren’t forced to close.”

“There is going to be a tremendous number of small businesses that will not make it through this crisis and there is a huge number of Americans who live paycheck to paycheck. Telling them to take two weeks off unpaid could mean phones and power turned off and no money for rent,” he added.

The Casa de Montecristo network, which is owned by Tabacalera USA, consists of nearly 30 stores across the country, some of which are in major metropolitan areas.

“As of now we are working on a state-by-state basis complying with the executive orders that have been passed down by either state or local government,” said Brad Winstead, CEO of Casa de Montecristo Inc. “In some locations we must operate as a grab-and-go, curbside business in light of restrictions. It is a challenge managing multiple action plans, but fortunately we have been able to keep our employees working and earning through this process.” 

Back in the northeast on Long Island, New York, cigar retailer Boris Grossman is cynical about the situation. He owns three Matador cigar shops, plus a Davidoff store in Brooklyn, and will have to close all of them by Sunday night. 

“Here’s what’s happening,” he said. “I laid off half my workforce, the remaining workforce is working for half pay. I closed the lounge portion of my stores. We’re open for take-out only business. I froze all my vendor payments and froze all my landlord payments. And I’m still wondering what the state is going to do regarding sales tax and OTP tax. Other than that, I’m fantastic.”

Finnie Helmuth has managed to keep The Humidour Cigar Shop open in Cockeysville, Maryland, but like so many other retailers, service is limited. “As of today, our store still remains open,” she said on Friday. “We will close when the state or federal ask us to close.” 

The smoking lounges within the store are closed but the shop is still open for in-and-out business as well as drive-up service.  

“We can ship directly to our customers,” Helmuth added. “I have never seen anything like this before and I hope my daughter never has to experience anything else like this in the future. The unknown is very scary but I do have faith and believe our country will get through this and small businesses will flourish again in time.”

Reporting was conducted by Jack Bettridge, Chris Esposito, Greg Mottola, Andrew Nagy, Thomas Pappalardo and David Savona.

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